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4 Megacap Stocks That Crushed the S&P 500 in 2013

The S&P 500 has produced solid returns of nearly 30% in 2013, but these giants of industry have done even better. Find out which ones topped the list.

The S&P 500 (SNPINDEX:^GSPC) has jumped out to huge gains of nearly 30% this year, riding the wave of optimism about an improving economy and companies' success in using low interest rates to bolster profit margins and produce more earnings for investors. Often, the largest members of the S&P 500 lag behind the index in such cases, as their size limits growth opportunities. Yet for Google (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN), Gilead Sciences (NASDAQ:GILD), and Boeing (NYSE:BA), market caps above $100 billion haven't stopped them from posting gains of 50% or more in 2013. Let's take a closer look at these four giants in their respective industries for secrets to their success.

Gilead Sciences stock has doubled in 2013, with positive results in several drug prospects leading investors to take an optimistic view of the biotech company. The company's hepatitis-C candidate, sofosbuvir, has drawn attention from investors all year, with positive phase 3 trial results in February leading the way to an application for FDA approval in April and hopes for final approval this month after a unanimous panel recommendation in October. Gilead has also had substantial success with its HIV drugs and with new candidates to fight various forms of cancer, and right now, the company seems to be firing on all cylinders.

Boeing has risen 83% since the beginning of the year, as the aerospace giant has continued to draw hundreds of billions of dollars in new aircraft orders. Boeing has a wide range of new and updated aircraft models in various stages of production, and profitable airlines have raced to upgrade their fleets to take advantage of potential fuel savings. Even ongoing issues with the 787 Dreamliner and worrisome competition from Airbus in Latin America haven't been enough to dampen enthusiasm for the stock.

Amazon is up 54%. The online giant is controversial because of its ongoing strategy of focusing on building revenue even at the expense of profits, leading some to believe that the stock doesn't justify the value that investors have put on it. But Amazon continues to seek more dominance of the quickly growing online retail business and has made big strides in capturing a larger portion of overall retail activity. Moreover, businesses like Amazon Web Services have substantial potential to contribute to profits in the long run, even though they largely fly under the radar of the company's retail operations.

Google has jumped 51%, cementing its status as the third-largest company by market cap in the S&P 500. For the online search giant, the key factor for its positive performance has come from mobile-device users, who've driven conversion on mobile ads up substantially. With examples of greater click-through and higher phone-traffic activity from mobile-ad campaigns, Google has been able to combat falling cost-per-click rates by producing higher ad-click volumes. As long as it can continue to find new avenues for growth, Google stands to climb well above the $1,000 mark it reached earlier this year.

Author

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.
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